This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

End of attention

Foreign companies

An interest in a foreign company that is a FIF includes:

a share other than an eligible finance share in the company

A share includes any interest in the capital of the company in the nature of a share or stock. Examples include ordinary, preference, bonus, and redeemable preference shares, as well as shares with deferred rights.

a legal document that confers an entitlement to acquire such a share including an entitlement arising from an option or convertible note. [subsection 483(1)]

Even if your name does not appear on a share certificate or share register of the foreign company as the legal owner of those shares, you are still held to have an interest in the FIF if you have a beneficial interest in that FIF (without the legal title to it). [section 488]

Eligible finance share

A share in a company is an eligible finance share if:

the shareholder is an Australian financial institution or subsidiary

the share was issued by the company in the ordinary course of business carried on by the shareholder

the shareholder is not an associate of the company, and

payments of dividends on the share may reasonably be regarded as equivalent to the payment of interest on a loan.

Section 327 of ITAA 1936 has more detail.

Foreign trusts

An interest in a FIF that is a foreign trust is:

an interest in the capital or income of the trust - including a unit in a unit trust, or

a legal document that confers an entitlement to acquire such an interest including an entitlement arising from an option or convertible note. [subsection 483(2)]

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If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.

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